Correlation Between NetSol Technologies and Agilent Technologies

Can any of the company-specific risk be diversified away by investing in both NetSol Technologies and Agilent Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NetSol Technologies and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NetSol Technologies and Agilent Technologies, you can compare the effects of market volatilities on NetSol Technologies and Agilent Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NetSol Technologies with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetSol Technologies and Agilent Technologies.

Diversification Opportunities for NetSol Technologies and Agilent Technologies

-0.19

Correlation Coefficient

NetSol Technologies  Agilent Technologies

Good diversification

The 3 months correlation between NetSol and Agilent is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding NetSol Technologies and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and NetSol Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NetSol Technologies are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of NetSol Technologies i.e., NetSol Technologies and Agilent Technologies go up and down completely randomly.

Pair Corralation between NetSol Technologies and Agilent Technologies

Assuming the 90 days trading horizon NetSol Technologies is expected to generate 1.67 times more return on investment than Agilent Technologies. However, NetSol Technologies is 1.67 times more volatile than Agilent Technologies. It trades about 0.03 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.04 per unit of risk. If you would invest  222.00  in NetSol Technologies on October 9, 2024 and sell it today you would earn a total of  32.00  from holding NetSol Technologies or generate 14.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NetSol Technologies  vs.  Agilent Technologies

NetSol Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NetSol Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Agilent Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Agilent Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NetSol Technologies and Agilent Technologies

The main advantage of trading using opposite NetSol Technologies and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetSol Technologies position performs unexpectedly, Agilent Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.

The idea behind NetSol Technologies and Agilent Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.